MicroStrategy’s board of directors has called for a 10-for-1 stock split. This move intends to make the company’s shares more accessible to investors and employees.
The firm will conduct a stock split by issuing additional shares as stock dividend. For every share owned as of the market close on August 1, 2024 [the record date], shareholders will receive additional shares.
The stock split will increase the number of shares each shareholder owns without changing the overall value of their investment in the company.
Further elaborating on the split, the business intelligence firm’s announcement underlined,
“As a result of the dividend, each holder of a share of MicroStrategy’s class A common stock will receive nine (9) additional shares of class A common stock and each holder of a share of MicroStrategy’s class B common stock will receive nine (9) additional shares of class B common stock.”
In both cases, shares will likely be distributed after the close of trading on August 7, 2024. On the following day when the market opens, i.e. on August 8, 2024, trading will commence on a split-adjusted basis.
MicroStrategy clarified that the stock dividend will not bear any impact on the voting and other rights of stockholders.
Even though a stock split does not affect the market cap, it does impact trading psychologically. Such an event is generally viewed as a positive catalyst because it ultimately leads to enhanced liquidity and affordability, thereby attracting retail investors.
MicroStrategy’s shares last closed at $1305.72 on Wednesday. It was up 4.46% during the pre-market hours on Thursday.
The Nasdaq-listed firm is also the largest corporate holder of Bitcoin. Around three weeks back, it acquired 11,931 BTC for $786 million. The latest acquisition brought the company's total holdings to 226,331 coins. At the press time price of $58,810, the company’s BTC stash was worth $13.3 billion.
